Geofencing Marketing Guide

What Is Geofencing Marketing & How To Use It? (Complete Guide)

Geofencing marketing is a location-based marketing strategy that targets users within a specific geographic area or virtual boundary. 

Businesses can send push notifications, ads, or personalized content to potential customers through mobile devices and GPS data when they enter a predefined geofencing area. This highly-targeted approach to digital marketing has become increasingly popular as it drives foot traffic, increases customer engagement, and boosts sales.

Example of Geofencing visualization

In this article we will cover the following topics:


Understanding the difference between Geomarketing and Geofencing

Geomarketing is a broader term enclosing different strategies and tactics using geographical information to plan and execute marketing efforts. It involves analyzing and understanding consumers’ geographic patterns and behaviors to create tailored marketing messages and campaigns. 

Geomarketing may include techniques such as geotargeting (delivering content to users based on their location), store locators, local search engine optimization (SEO), and location-based advertising, among others.

On the other hand, geofencing is a specific geomarketing technique that involves creating virtual boundaries or “fences” around designated geographic areas. When a user with a GPS-enabled mobile device enters or exits this predefined geofenced area, a trigger event occurs, prompting the delivery of targeted ads, push notifications, or personalized content to the user’s device. 

Geofencing is particularly effective for engaging customers near a store or event, offering timely and relevant promotions or information based on location.

Travel app using geofencing marketing
Example of a travel app using geofencing tools

How geofencing marketing has evolved over the years?

The journey of geofencing marketing has come a long way. From rudimentary GPS-based systems to sophisticated GIS technology today, it has continuously evolved to meet the changing demands of digital consumers.

As the use of mobile devices and the prominence of social media skyrocketed, marketers quickly recognized the potential of location-based marketing strategies. Therefore, the industry has witnessed a surge of advanced tools, technologies, and data-driven solutions that empower businesses to create highly-targeted, personalized campaigns that deliver tangible results.

Also, the peak of beacons, geofencing APIs, and machine learning has further improved geofencing marketing. Now, marketers can approach their target audience more precisely and efficiently. 

Geofencing example within a city

Today, geofencing marketing is a powerful marketing tool that plays an even more central role in the future of digital marketing.


We recommend you reading: Customer Data Analysis: How Customer Data Analysis Increases ROI


The benefits of Geofencing in today’s modern marketing strategies

Geofencing tools have become essential for marketers. 

Geofencing marketing works as a unique blend of targeted, location-based advertising. It acts as a bridge, connecting businesses with their audience in a more personalized and impactful way.

Marketers can now deliver tailored offers and content to users based on their real-time location. Incorporating geofencing advertising and marketing into an overall marketing plan can pay several benefits, such as:

  • Improved targeting accuracy.
  • Enhanced customer engagement.
  • More efficient ad spend allocation. 

Some statistics about the benefits of using Geofencing

  • Average CTR for geofenced audiences is 7.5% (To compare, average CTR for Facebook ads across all industries is 0.9 percent).
  • Geofencing marketing drives a 20% increase in store traffic.
  • Geofencing can lead to a 2x increase in-store visits and a 50% increase in mobile ad engagement.
  •  8 out of 10 marketers experienced increased customer engagement and higher response rates through location-based marketing, such as geofencing.
  • The global geofencing market would experience a compound annual growth rate (CAGR) of 27% between 2017 and 2023. This indicates the growing popularity and adoption of geofencing marketing strategies.

Instant advertising

One of the reasons why geofencing ads are better than traditional ads is that they are delivered almost instantly in response to a potential customer’s actions. Companies can start marketing to them immediately after they cross the geofence.

Identifying audiences using geo-targeting techniques

Another advantage of geofence advertising is that it covers specific geographic areas. This allows marketers to wrap strategic locations where potential customers are expected to be. 

Cost optimization

Having a targeted marketing campaign allows paying only for ads in specific areas. A correct setup guarantees reaching a much higher concentration of people more likely to become customers.

Flexibility

Geofencing tools are adaptable to any marketing strategy as they can cover proximity around any business, inside a point of sale, areas within a specific transit time, or locations with a high foot traffic volume.

Increase customer loyalty

It costs ten times as much to win a new customer as it does to retain an existing customer. So geofencing marketing can increase client retention and improve brand experience.

Optimize data and analytics

Geofencing marketing analytics generates valuable data, providing marketing teams with actionable insights for their next campaign. 

Geofencing analytics provides leaders with real-time data like impressions, views, and conversion zone visits.

By understanding geofencing and effectively leveraging its capabilities, businesses can make data-driven decisions. Also, marketers can optimize their campaigns, and, ultimately, experience a significant uplift in performance.

Geofencing can be integrated with other marketing channels, including email, social media, and content marketing. This creates a unified, consistent user experience across all touchpoints.

Using this multi-faceted approach helps businesses stay ahead of the competition while encouraging brand loyalty and driving tangible results.


Learn how Big Data is transforming Marketing: Big Data in Marketing: Role, Applications, & Benefits


How does Geofencing Technology work?

Geofencing technology combines location-based services and marketing tactics. This mix enables businesses to reach their target audience with pinpoint accuracy. 

At its core, geofencing relies on GPS, beacons, or Wi-Fi signals to establish virtual perimeters or boundaries around specific locations. Location examples can be retail stores, event venues, or neighborhoods.

First, an event is triggered when a mobile device with location services enabled crosses into or out of the established geofencing area. 

Then, this event prompts the delivery of push notifications, targeted ads, or personalized content directly to the user’s device. This creates a tailored and punctual experience for potential customers.

By harnessing the power of geofencing technology, businesses can serve relevant content to users at the best time. The result is driving engagement and fostering a connection with their target audience. 

Geofencing marketing examples: How are brands using it?

Burger King

In 2015, Burger King started using geofencing and location technology to “steal” customers from rival McDonald’s. Using location-based marketing, Burger King launched the “Whopper Detour” campaign, which increased downloads of its mobile app by 1.5 billion.

Also, their campaign produced over 1.5 million app downloads.

Geofencing case study: How Burger King developed a campaign against McDonald's

McDonald’s

McDonald’s was not going to get behind its main competitor. In 2016 the brand began testing geofencing on its mobile app to attract more customers. 

McDonald’s began integrating geofencing technology into its mobile app to reduce queues and traffic jams and serve fresh and hot food. 

Case Study: How McDonald's used geofencing to get more customers
Source: MPC

Following the success of its campaign, McDonald’s decided to take it further with geofencing. The objective was to increase foot traffic and improve the customer experience.

Starbucks

Starbucks has also been experimenting with location marketing to gain customer experience. 

To entice customers with special offers and discounts, Starbucks uses customers’ real-time location data to notify them about special deals. These marketing tactics help Starbucks leave a lasting impression on its customers.

Case study: How Starbucks y geofencing strategies helped the brand with their customer experience

GPS vs. Beacons: Selecting the Ideal Solution for Your Geofencing Needs

When implementing geofencing marketing campaigns, businesses often must choose between GPS-based geofencing and beacon technology. 

Both solutions have distinct advantages, and the optimal choice depends on the marketing strategy’s specific needs and goals.

GPS-based geofencing

GPS-based geofencing uses satellite signals to decide the user’s location, making it an excellent choice for outdoor, wide-scale campaigns. 

GPS Geofencing example for an airline
Example of an airline using GPS-based geofencing to send personalized messages to their passengers.

It’s well-suited for businesses targeting large geographic areas or looking to engage users as they enter or exit specific locations. For example, shopping malls, restaurants, or event venues.

Beacons

On the other hand, beacon technology leverages Bluetooth Low Energy (BLE) signals to communicate with nearby devices. That is why they provide more precise indoor targeting capabilities. 

For example, beacons are ideal for businesses seeking to engage customers within a retail store or at an exhibition booth. They help deliver personalized content or promotions based on the user’s exact location.

In summary, GPS-based geofencing is the go-to choice for broader outdoor targeting. At the same time, beacons provide highly accurate, indoor location-based marketing. 

When selecting the most suitable solution, it is essential to consider the campaign objectives and the desired user experience.

How to develop a winning Geofencing Marketing Campaign?

Launching a geofencing marketing campaign requires careful planning, execution, and monitoring to ensure its success. Here are some key steps to create a well-rounded campaign that effectively targets your audience and maximizes your marketing ROI.

Identifying your target audience and selecting geofence locations

Start by defining your target audience and their demographics, preferences, and behaviors. This information helps you choose the most suitable geofence locations.

Choose places where your audience is most likely to be found. Examples include shopping centers, competitor stores, or popular landmarks.

Crafting engaging and personalized ad content

Once you’ve established your geofence locations, develop compelling ad content that speaks directly to your target audience’s needs and desires. Personalize the content based on user location data. 

 For example, you can base your ad on purchase preferences. This will enhance engagement and conversion rates for your mobile marketing.

Implementing effective calls-to-action and tracking

In your geofencing ads, incorporate clear, persuasive calls-to-action (CTAs) to encourage users to take the desired action.  

Some common objectives are:  

  • Making a purchase.
  • Visit a new store.
  • “Steal” visitors from competitors.
  • Attract new visitors. 
  • Increase brand fidelity from recurrent customers. 

Track and measure results

Additionally, set up tracking mechanisms to measure campaign performance.

Tracking metrics can include:

  • Click-through rates
  • Conversions
  • Visits
  • Foot traffic volumes. 

Over time, this data will be critical for optimizing your campaign and refining your geofencing marketing strategy.

The Future of Geofencing Marketing

As technology advances and consumer expectations evolve, geofencing marketing is set to play an increasingly prominent role in marketing. 

Let’s take a closer look at some of the key developments and trends shaping the future of geofencing marketing:

The influence of emerging technologies on geofencing marketing

Integrating technologies such as Big Data, AI, Machine Learning and IoT can improve geofencing marketing’s accuracy and personalization. This will result in more precise and personalized experiences for customers. 

New advances enable marketers to deliver more contextually relevant and timely content to their target audience. The result: Enhance user experiences and driving engagement.

Integrating geofencing with other marketing channels

Businesses are recognizing the potential of geofencing marketing. This will result in greater integration with other marketing channels, such as email, social media, and content marketing. 

These integrations will lead to a more holistic and unified marketing approach. With this, marketers can have a consistent and impactful user experience across all touchpoints.

Data-driven marketing and personalised experiences are becoming increasingly important. Geofencing marketing is a powerful tool that marketers are increasingly turning to. In our opinion, It will remain a vital part of a marketer’s toolkit. 

Location-based marketing is evolving. Businesses that use geofencing can gain a competitive advantage in customer engagement, brand loyalty, and marketing performance. This will give them an edge over their competitors.

In conclusion, the future of geofencing marketing is bright and full of possibilities. Businesses can take advantage of the potential of this marketing strategy. Also, it can help them get measurable outcomes in a changing digital (and physicial) world. To accomplish this,marketing teams need to be aware of the latest trends and technologies.

At PREDIK Data-Driven we specialize in profiling your consumers to create cost-effective geofencing marketing strategies. If you want to optimize your advertising campaign costs, don’t hesitate to contact us.

CTA Geofencing Services

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